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European technology industry: Microsoft needs to make more adjustments on cloud computing monopoly

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European technology industry: Microsoft needs to make more adjustments on cloud computing monopoly

The European Commission is reportedly discussing whether to launch a formal antitrust investigation after European cloud computing service providers complained to the European Commission about Microsoft’s monopoly on “bundling its own cloud computing services with its operating system. German software developer Nextcloud, one of the complainants, said Microsoft’s response to the European Commission’s antitrust complaint is insufficient and that the company needs to make further adjustments.

French cloud computing provider OVHcloud is also waiting for Microsoft to come up with a more concrete solution, a person familiar with the matter said, adding that among the vendors that have filed antitrust complaints with the European Commission.

Microsoft could avoid a formal antitrust investigation by the European Commission if it can reach a settlement privately with the technology companies that filed the complaints. If the investigation is opened and the antitrust charges are confirmed, the European Commission could issue a fine of up to 10% of Microsoft’s total global revenue.

In 2021, the aforementioned German manufacturer Nextcloud reportedly took the lead in complaining to the European Commission, the EU’s executive body, about Microsoft’s monopolistic practices, saying that Microsoft had abused its dominant position in computer operating systems by combining the network storage service OneDrive (a type of Microsoft cloud computing service) The company said that Microsoft abused its dominant position in computer operating systems by bundling the network storage service OneDrive (a Microsoft cloud computing service) with two operating systems, Windows 10 and Windows 11.

Microsoft has been a frequent visitor to the European Commission on antitrust issues, having been the subject of numerous formal antitrust investigations and charges over the past several decades (mainly related to the bundling of its own applications in the Windows operating system), and having been fined a total of €1.6 billion ($1.7 billion). The European Commission has issued a total of €1.6 billion ($1.7 billion) in fines.

On Wednesday (March 22), Nextcloud CEO Frank Karlitschek told the press that Microsoft had contacted Nextcloud about a year ago, but did not address the European tech industry’s concerns about bundling of cloud computing services.

Karlitschek said he hopes to have more conversations with Microsoft, but they must be serious talks about the industry’s concerns.

Among the vendors reportedly filing complaints to the European Commission this time around are OVHcloud, Italian cloud computing provider Aruba, and a Danish association representing the cloud computing industry. The vendors’ complaints center on some of the practices of Microsoft’s cloud computing business and customer licensing agreements.

Last October, Microsoft said it had made some changes to its cloud computing customer licensing agreements, which amounted to a response to complaints filed by the EU cloud computing industry.

A Microsoft spokeswoman said Microsoft appreciated the fruitful talks with European service providers that led to adjustments in Microsoft’s product policies, and Microsoft appreciated the feedback from European service providers.

At this time, Aruba and the “Danish Cloud Community” association have no further comment.

In 2022, another industry association, the European Alliance of Cloud Service Providers, also filed an antitrust complaint against Microsoft’s cloud business with the European Commission, and a spokeswoman for the association said that last week, Microsoft had contacted the association to express its willingness to negotiate and make some adjustments to its products and services.

It is worth mentioning that the members of the European Alliance of Cloud Computing Service Providers include Amazon.com, the absolute leader of the global cloud computing market.